Question

Categorize each transaction according to the U.S. account to which it belongs and the direction the money flows.

a. An Australian company buys steel from a U.S. firm.
b. The Federal Reserve buys $2 billion worth of euros.
c. Profits are earned by a U.S. based mining company operating in Mexico.
d. An English company purchases a U.S. confectionary manufacturer.

Answer 1

The missing options are "US Account - Private sales and purchase of assets, Office asset sales and Purchase, Transfer, Factor Income, Sales and Purchase of goods and services

The direction of flow option are "Payment to foreigners, Payment from foreigners"

a. An Australian company buys steel from a U.S. firm.

Account: Sales and purchase of goods and service

Direction: Payment from foreigners"

b. The Federal Reserve buys $2 billion worth of euros.

Account: Official asset sales and purchase

Direction:Payment to foreigners

c. Profits are earned by a U.S. based mining company operating in Mexico.

Account: Factor Income

Direction: Payment from foreigners

d. An English company purchases a U.S. confectionary manufacturer.

Account: Private sales and purchase of goods

Direction: Payment from foreigners